Faculty of Business, Economics & Accounting

Department of Business Studies

HELP Bachelor of Business (Hons) Year 2

INTERNAL SUBJECT DETAILS

Semester 3, 2016
Subject:

ECO 202
Macroeconomics Analysis

Subject Lecturer/Tutor:

Mr Wan Cheong Kin

Telephone: 03-2716 2120
Fax:
03-2093 5311
Email:
cheongkin.wan@help.edu.my

Consultation:

By appointment only

PRE-REQUISITE (S)
ECO101
ECO102

PRINCIPLES OF MICROECONOMICS &

PRNCIPLES OF MACROECONOMICS

SYNOPSIS
The focus of this subject is on understanding the impact of domestic policies, global
macroeconomic activities and international financial markets on the domestic economy.
Malaysia can be described as a small open economy that is integrated into the global
economy. Events in the major economies and key financial markets can have strong
impacts on the domestic Malaysian economy. Exchange rates, interest rates, stock
prices and foreign economic policies are vital factors in determining Malaysias future
economic progress. Students are expected to remain cognisant of currency economic
and financial issues throughout the semester and be able to analyse these issues using
the tool kit of economic techniques provided in this subject.
OBJECTIVES
Upon completion of this subject, students should be able to:

recall the basic concepts and definitions of macroeconomics;

explain and illustrate the IS-LM model which links goods market theories and
money market theories using both graphical and mathematical techniques;

analyse the impacts of fiscal and monetary policies on the macroeconomic variables
using the IS-LM model (short run analysis);

explain the relationship between real wages and the level of unemployment (or
employment) in the labour market;

explain the AD-AS model which links goods, financial and labour markets;

analyse the impacts of fiscal and monetary policies on the macroeconomic variables
using the AD-AS model (medium run analysis);

explain the impacts of expectations about future movements in macroeconomic

variables on the actual movements in economic variables;

explain and illustrate the IS-LM model in the context of open economy (in both
goods and financial markets) and different exchange rate system (i.e. flexible or
fixed exchange rate system);

explain the distinction between real and nominal exchange rates, interest parity and
balance of payment, and

TOPICS
Topic 1

Introduction to Macroeconomics

Topic 2

The Basic Macroeconomic Model

Topic 3

The Labour Market

Topic 4

AS and AD in the Macroeconomic Model

Topic 5

Unemployment, Inflation, Interest Rate and Exchange Rates

Topic 6

The Role of Expectations

Topic 7

Open Economy Macroeconomics

Topic 8

Cases in Inflation, Unemployment and Exchange Rate Instability

Topic 9

Overview: Economic Policy

PRESCRIBED TEXT
Blanchard, O. (2013) Macroeconomics, Global edition (6th ed.), Prentice Hall: New
Jersey.
RECOMMENDED REFERENCES
Froyen, R.T. (2002) Macroeconomics: Theories and Policies, 7th edn, Prentice Hall.
Gordon, R. J. (2003) Macroeconomics, 9th edn, Addision-Wesley.
Parkin, M. (2003) Macroeconomics, 6th edn, Addision-Wesley.

Subject Outline / Teaching Plan

Department
Lecturer

: Business Studies
: Mr. Wan Cheong Kin

Subject Code : ECO 202

Subject Title : Macroeconomics Analysis

SUBJECT DELIVERY
WEEK

LECTURE TOPIC

CHAPTERS

Topic 1.1 Introduction

Chapter 1 and 2

Topic 1.2 The basic macroeconomic model

Chapter 3, 4 and 5

Topic 2.1 The labour market

Chapter 6

Topic 2.2 AS and AD in the macroeconomic model

Chapter 7

Topic 2.3 The Phillips Curve the natural rate of

unemployment

Chapter 8

Topic 2.4 Money growth and economic activity

Chapter 9

Topic 3.1 The role of expectations

Chapter 14 and 15

Midterm Test & Break

Topic 3.1 The role of expectations

Chapter 16 and 17

10

Topic 3.2 Open economy macroeconomics

Chapter 18 to 21

11

Topic 3.2 Open economy macroeconomics

Chapter 18 to 21

12

Topic 4.1 Macroeconomic problems

Chapter 22 and 23

13

Topic 4.2 Macroeconomic policies

Chapter 24 and 25

14 15

Final Examination

ASSESSMENT
There are 2 assessment items for this subject:
Assessment Items

Value

1. Mid Semester Test (Closed Book):

Due Date

40%

Week 8 (Date to be advised later)

60%

Examination period 26 November

10 December 2016**

Chapters 1 to 9 in the prescribed text.

2. Final Examination (Closed Book):
Chapters 14 to 25 in the prescribed text.

REQUIREMENTS
To gain a pass in this subject, students must:

Achieve a passing grade in the final examination ie. score a minimum of 50

marks out of 100 marks if there is an examination for this subject.

Attempt BOTH areas of assessment; and achieve a total result of 50% or better
overall.

** - Please check on the notice board and My Acel for the actual date. HELP
University reserves the right to make any changes to the above where appropriate.

Department of Business Studies

ACADEMIC INTEGRITY
Honesty and Responsibility
Academic integrity is an important tenet for HELP University. In pursuit of the highest
standards of academic integrity, the Department of Business Studies holds it students to
the highest ethical standards defined by the Rules and Regulations section of the
Academic Handbook. All students at the Department of Business Studies are subjected
to and are bound by the Student Academic Misconduct Rule to assure academic
honesty. Students are required to sign a pledge on the assignment cover sheet before
submitting your assignments to the Administration Office of the Faculty of Business,
Economics & Accounting.
What is Plagiarism?
Plagiarism is academic dishonesty or academic theft, and it is a serious academic
offence. Plagiarism includes, but is not limited to, the followings:
1. quote, paraphrase or summarize someone elses ideas, theories or data, in whole
or in part, without appropriate acknowledgement
2. borrow ideas, opinion or words, in whole or in part, from other sources without
properly crediting the author(s)
3. use any facts, statistics, diagrams or graphs, in whole or in part, without
acknowledging the source clearly
4. claim or imply original authorship of someone elses ideas, theories or data, in
whole or in part, as your own
5. employ or allow someone to help to revise, amend or write your work and pass
off as your own original work
6. collaborate with or allow other students to copy your work
7. draw on sources more than what you have acknowledged by citations
While a student is not discouraged to discuss an assignment with his/her friends or
classmates, the work he/she submits must be done by the student alone. If a student
shares his/her assignment with other students and they plagiarize it, the student is as
guilty as those students who plagiarized his/her assignment. All parties to plagiarism
are considered equally guilty. Under no circumstances should a student be involved in
collusion with other students unless he/she is permitted to work on an assignment
jointly by the lecturer/tutor. If a student is unsure what constitutes plagiarism, he/she is
obliged to consult the lecturer/tutor on the matter before submission of his/her
assignment.
When and How to Reference?
Knowing when and how to cite is a students responsibility. If he/she is in doubt or
need more help on this matter, the student may consult the lecturer/tutor. The following
list comprises some of the sources a student will need to reference. The list is by no
means exhaustive, but simply consists of the most common sources used by students to
complete their work.
1. Books
6

2.
3.
4.
5.
6.
7.
8.

Chapters in books
Journal articles
Conference papers
Newspaper articles
Magazines
Websites
Study guide

Students are advised to cite in the following cases [1]:

1. When he/she quotes two or more words verbatim, or even one word if it is used
in a way that is unique to the source
2. When he/she introduce facts that he/she have found in a source
3. When he/she paraphrase or summarize ideas, interpretations, or conclusions that
he/she find in a source
4. When he/she introduce information that is not common knowledge or that may
be considered common knowledge in your field, but the reader may not know it
5. When he/she borrow the plan or structure of a larger section of a sources
argument (for example, using a theory from a source and analyzing the same
three case studies that the source uses)
6. When he/she build on anothers method found either in a source or from
collaborative work in a lab
7. When he/she build on anothers program in writing computer code or on a notcommonly-known algorithm
8. When he/she collaborate with others in producing knowledge
In general, a referencing system requires two parts:
1. In-text citations
This is information about a source within the text of an assignment.
2. List of references
This is a list of all sources a student has used to research his/her assignment. It
is alphabetically arranged by author surname and appears immediately after the
last page of an assignment.
Different faculties or departments may have different requirement on how referencing
for an assignment should be done. The various formats used for in-text citations and list
of references are available in the following websites:
1. Harvard System (http://www.adelaide.edu.au/library/guide/gen/harvard.html)
2. Chicago Style (http://www.chicagomanualofstyle.org/index.html)
3. American Psychological Association or APA Style (http://www.apastyle.org)
4. Modern Language Association of America or MLA Style (http://www.mla.org)
Once a student has selected a referencing style for his/her assignment, he/she must
follow the same style consistently throughout the assignment. We strongly suggest that
the student consults the lecturer/tutor about which method to use before submission of
his/her assignment.

http://www.yale.edu/bass/writing/sources/plagiarism/warning.html, accessed May 18, 2008.

What are the Procedures and Penalties for Plagiarism?

When a lecturer/tutor encounters a possible case of plagiarism, the lecturer/tutor shall
report the matter to the Head of the Department, who then initiates an investigation on
the matter. The following procedures would be carried out:
1. The lecturer/tutor shall provide evidence that substantiates an academic offence
has occurred. The following documentations must be ready prior to reporting of
alleged plagiarism:
a. Copy of the alleged plagiarized assignment
b. Copy of the source material (e.g. articles, websites, newspaper, etc.)
c. Report of plagiarism
d. Any other information that would support the claim of plagiarism
2. If the evidence warrants an accusation of academic offence, the Head of
Department shall establish a Board of Inquiry comprising 3 academic staff. The
Department shall provide all necessary documentations, including report on
prior academic offences if applicable, to the Board of Inquiry.
3. The Board of Inquiry shall put the matter to the student in writing and give
him/her an opportunity to respond to the accusation within 3 working days.
4. The student will be required to attend a meeting with the Board of Inquiry.
After meeting the student, the Board of Inquiry shall decide whether or not the
alleged plagiarism has occurred. The following documentations shall be
submitted to the Head of Department at the end of the meeting:
a. Findings of the investigation
b. Recommended action(s) to be taken or imposed
5. The Head of Department shall review the Board of Inquirys report with
supporting evidence and shall decide on an appropriate action(s) based on the
recommendation of the Board of Inquiry.
6. The decision of the Head of Department shall be put in writing to the student.
Copies of all documentations will be retained in the Department.
7. If the student feels that he/she has been unfairly accused or treated, the student
may appeal to the Head of Department within 5 working days.
8. The Head of Department shall review the appeal and the final decision will be
communicated to the student in writing and a copy will be kept with the
Department. Once a determination of plagiarism and penalty has been made by
the Head of Department, the investigative process will be deemed to have ended
and the student will not be allowed to appeal.
Possible penalties for plagiarism range from mark reduction for the assignment to
expulsion from the University. The student will not be allowed to make up the
assignment. If plagiarism has been found to have occurred, the Department will take
action(s) as determined by the forms of plagiarism implicated:
1. Complete plagiarism
Verbatim copying another persons work without acknowledgement
1 st offence : A grade of F in the subject and a warning letter will be
issued
2 nd offence : Expulsion from the University at the discretion of the Head of
Department
2. Substantial plagiarism
Near-verbatim copying another persons work by simply altering the order of
the sentences or the format of presentation or by changing a few words or
phrases without acknowledgement.
8

1 st offence

Zero mark on the assignment and a warning letter will be

issued
2 nd offence : A grade of F in the subject and a warning letter will be
issued
rd
3 offence : Expulsion from the University at the discretion of the Head of
Department
3. Minimal plagiarism
Acknowledgement is made but paraphrasing by changing and/or eliminating
some words
1 st offence : Deduction of 50% of available marks on the assignment and a
warning letter will be issued
2 nd offence : A grade of F in the subject and a warning letter will be
issued
3 rd offence : Expulsion from the University at the discretion of the Head of
Department
4. Unintentional plagiarism
Insufficient acknowledgement by not applying citation or quotation marks
correctly
1 st offence : Deduction of up to 50% of available marks on the assignment
and a warning letter will be issued
nd
2 offence : A grade of F in the subject and a warning letter will be
issued
3 rd offence : Expulsion from the University at the discretion of the Head of
Department
Pleading ignorance or unintentional plagiarism does not constitute valid reasons for
plagiarism and will not avoid the penalties from being imposed. Excuses for acts of
plagiarism such as the following, but not limited to, will not be entertained:
1. I dont have time to do the assignment
2. I have too many assignments due on the same day
3. I dont know, I really didnt do it
4. I am not aware
5. I dont understand what plagiarism means
6. I have no intention to plagiarize
7. I forgot to cite the reference
8. I forgot to include the bibliography
9. My English is not good
10. My lecturer/tutor did not explain to me
11. In my country, it is alright to copy someone elses work
12. My friend copied my assignment when I let him/her to look at my assignment
13. My friend copied my assignment when I allow him/her to use my laptop
14. I did my assignment in the computer lab, someone must have copied my work
15. I asked my friend to submit my assignment and he/she copied my work
16. I discussed my assignment with my friends, so our answers are the same/similar
17. Even though I do not have in-text citation but I have bibliography/reference list
Students should be reminded that it is their responsibilities to take due care throughout
their written work to effectively reference or cite when they use others ideas from any
source.

DEPARTMENT OF BUSINESS STUDIES

SEMESTER X, 20XX
SAMPLE FINAL EXAMINATION
Subject Code

ECO202

Subject Name

MACROECONOMIC ANALYSIS

This examination carries 60% of the total assessment for this subject
Examiner(s)

Moderator(s)

DR. ABC

Day

Date

Time :

Time allowed:

3 HOURS

INSTRUCTION(S):
1. Answer ALL the questions.
2. Writing on the examination answer book is NOT permitted during reading time.
3. This is a CLOSED BOOK examination.
4. Students are permitted to bring in a non-programmable scientific calculator in the exam hall.
5. Students must pass the final examination paper (i.e. obtain 50 marks from 100 marks) to obtain a passing grade
in this subject.

(This question paper consists of 4 questions in XX printed pages, including cover page)

10

Answer ALL questions (100 marks)

QUESTION 1
Based on the following information provided, answer the following questions:
Consumption function: C = 10 + 0.8Yd
Government expenditure: G = 40
Investment function: I = 5
Tax function: T = 0.14Y
Export: EX = 5
Import: IM = 0.14Y
a) Calculate the equilibrium national income using
i)
Expenditure-output approach
ii)
Leakage-injection approach

(5 marks)

b) Sketch separate diagrams indicating the equilibrium income for (i) and (ii).
(5 marks)
c) Calculate the expenditure multiplier. What does the computed value imply?
(3 marks)
d) What is the government budget at the equilibrium income?
(2 marks)
e) What is the problem faced by the economy if full employment income is 120?
Draw and label on graph (appropriate values must be calculated).
(5 marks)
f) What policy (ies) would you recommend to solve the macroeconomic problem
in part (e)?
(5 marks)
QUESTION 2
The money market and goods market of Inland may be characterized by the functions
below:
Money demand: L = 200 + 0.20Y 10r
Money supply: MS = 250
Consumption function: C = 100 + 0.80Yd
Taxation: T = 20 + 0.25Y
Investment: I = 300 40r
Government spending: G = 66
a) Derive the IS and LM functions.

(5 marks)

b) Calculate the equilibrium income and interest rate. Indicate the equilibrium income
in a diagram.
(5 marks)
11

c) Suppose the government increases expenditure by 10 to stimulate the economy,

what is the new level of equilibrium income and interest rate?
(5 marks)
d) Is there any crowding out? Calculate the change in private investment.
(5 marks)
e) How can the crowding out effect be avoided if higher income level is desirable?
(5 marks)
QUESTION 3
(a)

Monetarist economists believe that sustained inflation is purely a monetary

phenomenon. Explain.
(15 marks)

(b)

Discuss whether a low rate of inflation should be the economic priority of a

government.
(10 marks)

QUESTION 4
With the aid of diagram explain appreciation and depreciation of currency. Discuss the
effects of depreciation and appreciation currency to the economy.
(25 marks)

**END OF EXAMINATION PAPER**

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